[Congressional Record Volume 155, Number 118 (Friday, July 31, 2009)]
[Extensions of Remarks]
[Pages E2123-E2124]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      TAXPAYER RESPONSIBILITY, ACCOUNTABILITY, AND CONSISTENCY ACT

                                 ______
                                 

                           HON. JIM McDERMOTT

                             of washington

                    in the house of representatives

                        Thursday, July 30, 2009

  Mr. McDERMOTT. Madam Speaker, earlier today I introduced 
legislation--the Taxpayer Responsibility, Accountability, and 
Consistency Act. The aim of this legislation is to reverse the growing 
trend of the misclassification of employees as independent contractors. 
Independent contractors serve a legitimate purpose in our workforce, 
our economy, and in many business models. These contractors are 
important to our economy and often provide the flexibility that many 
businesses need. Some employers, however, are using a loophole that 
exists in the Internal Revenue Code to treat workers that are actually 
employees as contractors in order to reduce their own tax liability and 
avoid federal and state labor law. When employees are misclassified as 
contractors, responsible companies lose business,

[[Page E2124]]

workers lose rights and protections, and the federal and state 
governments lose out of billions of dollars in much-needed revenue.
  This legislation is similar to the measure I introduced last year, 
along with Representatives Richard Neal, and John Tierney. I am pleased 
we have joined together again this Congress to reintroduce this 
initiative. Our efforts to construct this bill were informed by 
information obtained through public hearings on this issue in the House 
Committee on Ways and Means and the House Committee on Education and 
Labor.
  The Taxpayer Responsibility, Accountability, and Consistency Act 
would close the tax loophole that allows employers to misclassify 
employees as contractors at will. It aims to put all employers on a 
level playing field, protect workers, and reduce the federal budget 
deficit. The intention of the bill is not to deny businesses the 
ability to use legitimate independent contractors; instead it is to 
ensure that laws that determine what an employee or independent 
contractor is are evenly applied. They are not today.
  I recognize that this issue is one that has vexed the Congress for 
some time and that forging the necessary degree of consensus to address 
this problem will be difficult. I intend for the legislation introduced 
today to serve as a basis for discussion and look forward to working 
with many stakeholders to perfect the bill and help push for its 
passage.

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